UK biotech financing up 29% on last quarter

Great British Pounds, Investment

The second quarter of 2023 has seen steady growth in financing activity for the UK’s life sciences sector, according to new data released by the BioIndustry Association (BIA) and Clarivate.

The positive news comes soon after industry figures welcomed recent announcements to unlock new sources of capital in the City of London.

Last month, the UK Chancellor and the Lord Mayor of London launched Mansion House Compact, which is an agreement by pension providers to allocate a minimum 5% to unlisted equities by 2030.

Despite the prevailing global market downturn, UK-headquartered life science and biotech companies secured a total of £382 million in venture and public financing, up 29% from the previous quarter’s £295 million. The growth was largely driven by venture capital investment.

There was a healthy spread of investment between early and late-stage private companies, with seed investment notably rebounding after a sluggish start to the year. UK companies raising follow-on financing also faced challenges, securing only £44 million this quarter, but showing signs of improvement compared to the previous quarter’s £37m.

Steve Bates OBE, CEO of BIA, commented: “Our sector is demonstrating resilience and growth amid challenging times. It is fantastic to see venture investors continue to back the UK’s life science companies and even raising new capital themselves, like London-based Medicxi’s $400 million fund, showing that there is more money to deploy in the years to come.”

Biotech around the world

Mike Ward, Global Head of Life Sciences & Healthcare Thought Leadership, Clarivate, said: “Globally biotech still remains an attractive sector for investment with the sums raised in the second quarter slightly above the first. At £3.9bn there was a 26% quarter-on-quarter increase in global VC investments driven mainly by 41% and 42% increases in fundraising among US and European biotechs respectively, although there was a dramatic drop in the amounts put to work by VCs in Asia Pacific biotechs.

“The market for initial public offerings remains lackluster across the globe, while the appetite for follow-on financing grew for US and Asia-Pacific biotechs, European biotechs struggled to take on additional finance.”

Read the full report.

Edited by Diana Spencer, Senior Digital Content Editor, Drug Discovery World

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